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Tuesday, March 29, 2016

The Economics of Pandemic Preparedness

Asking politicians to spending money to reduce the risk of a future problems can be problematic. After all, it's hard to claim political credit for avoiding something and causing it not to happen. But in the case of planning ahead to reduce the risks and costs of pandemics, the case for advance planning seems especially strong. The Commission on a Global Health Risk Framework for the Future spells out the issues in its report, The Neglected Dimension of Global Security: A Framework to CounterInfectious Disease Crises, which is available here with free registration from the National Academies Press. This Commission was sponsored by a coalition of philanthropic and government groups. In included 17 members from 12 countries, who also got reactions from an oversight group and invited comments at public meetings. It was chaired by Peter Sands, who used to be the CEO of Standard Chartered, and is now a Senior Fellow at teh Mossavar-Rahmani Center for Business and Government at Harvard Kennedy School, with Oyewale Tomori, President of the Nigerian Academy of Science, serving as vice-chair.

A very quick summary of the report would be that it suggests spending $4.5 billion per year to build up the world's response system to pandemics. It offers estimates that the costs of pandemics could average $60 billion per year in the next century.

Here's a description of costs (citations and footnotes omitted):

The World Bank has estimated the economic impact of a severe pandemic (that is, one on the scale of the influenza pandemic of 1918–1919) at nearly 5 percent of global gross domestic product (GDP), or roughly $3 trillion. Some might see this as an exaggeration, but it could also be an underestimate. Aggregate cumulative GDP losses for Guinea, Sierra Leone, and Liberia in 2014 and 2015 are estimated to amount to more than 10 percent of GDP. This huge cost is the result of an epidemic that, for all its horror, infected only about 0.2 percent of the population of Liberia, roughly 0.25 percent of the population of Sierra Leone, and less than 0.05 percent of the population of Guinea, with 11,287 total deaths. The Commission’s own scenario modeling, based on the World Bank parameters, suggests that during the 21st century global pandemics could cost in excess of $6 trillion, with an expected loss of more than $60 billion per year.

Indeed, the economic impact of infectious diseases appears to be increasing as greater human and economic connectedness—whether through transnational supply chains, increased travel, or ubiquitous access to communication technologies and media—fuel contagion, both of the virus itself and of fear. Most of the economic impact of pandemics stems not from mortality but from behavioral change, as people seek to avoid infection. This behavioral change is driven by fear, which in turn is driven by a potent mix of awareness and ignorance. ... The experience of SARS is instructive: viewed from the perspective of overall mortality, SARS infected “only” 8,000 people and killed less than 800. Yet the economic cost of SARS has been estimated at more than $40 billion. At the peak of SARS, Hong Kong saw a 66 percent reduction in airport arrivals and a 50 percent reduction in cinema admissions. ...

We should not become fixated on the probability of a “once-in-a-100-years” pandemic of the 1918–1919 influenza pandemic of severity. Much less virulent pandemics can still cause significant loss of life and economic impact. The influenza pandemics of 1958 and 1968, while far less deadly than the one in 1918–1919, are estimated to have cost 3.1 percent and 0.7 percent of global GDP, respectively. Potential pandemics, that is outbreaks or epidemics that could become pandemics if not effectively contained, can also have enormous impact. Ebola, an epidemic that looked as if might have the potential to become a pandemic, has killed more than 11,000 people and cost more than $2 billion. While there is a high degree of uncertainty, the commission’s own modeling suggests that we are more likely than not to see at least one pandemic over the next 100 years, and there is at least a 20 percent chance of seeing 4 or more ... .

What's the proposed solution? The report offers lots of detail, but the broad three-point plan is national action, global cooperation, and focused R&D:

Against this, we propose incremental spending of about $4.5 billion per year—a fraction of what we spend on other risks to humankind. ...

Robust public health infrastructure and capabilities are the foundation of resilient health systems and the first line of defense against infectious disease outbreaks that could become pandemics. Yet far too many countries have failed to build the necessary capabilities and infrastructure. Even by their own internal assessments, 67 percent of World Health Organization (WHO) member states fail to meet the requirements of the 2005 International Health Regulations (IHR); objective external evaluations
would almost certainly reveal even lower rates of compliance. ...

Although reinforcing the first line of defense at the country level is the foundation of a more effective global framework for countering the threat of infectious diseases, strengthening international coordination and capabilities is the next most vital component. Pandemics know no borders, so international cooperation is essential. Global health security is a global public good requiring collective action. ... The Commission believes that an empowered WHO must take the lead in the global system to identify, prevent, and respond to potential pandemics. There is no realistic alternative. However, we believe that the WHO must make significant changes in order to play this role effectively. It needs more capability and more resources, and it must demonstrate more leadership. ...

This means accelerating R&D in a coordinated manner across the whole range of relevant medical products, including vaccines, therapeutics, diagnostic tools, personal protective equipment, and instruments. To ensure that incremental R&D has maximum impact in strengthening defenses against infectious diseases, we propose that the WHO galvanize the creation of a Pandemic Product Development Committee (PPDC) to mobilize, prioritize, allocate, and oversee R&D resources relating to infectious diseases with pandemic potential.

The report also points out that spending in these areas is likely to have substantial benefits even if a pandemic does not occur. "Moreover, the risks of spending too much or too little are asymmetric. Even if we have overestimated the risks of potential pandemics, money invested to mitigate
them will still be money well spent. Most of the investments we recommend will help achieve other high-priority health goals, such as countering antimicrobial resistance and containing endemic diseases like tuberculosis and malaria. Yet if we spend too little, we open the door to a disaster of terrifying magnitude."

I would probably quibble with some of the details of the recommendations. For example, I think the report may underestimate the difficulties of having the World Health Organization take a leading role in this effort, and a different institutional framework might be needed. But that said, the case for acting to limit pandemics seems ironclad. As an example of the potential gains, the report points to the example of Uganda, which has managed to deal with multiple outbreaks of Ebola in the last 15 years:

Before the current West African Ebola outbreak, Uganda was the site of the largest Ebola outbreak in history, with 425 reported cases in 2000. Yet the outcome of this outbreak was distinctly more positive, because Uganda had in place an operational national health policy and strategic plan, an essential health services package that included disease surveillance and control, and a decentralized health delivery system. After 2000, Uganda’s leadership realized that, despite the successful containment of the outbreak, a focus on strengthening surveillance and response capacities at each level of the national system would greatly improve the country’s ability to respond to future threats. Uganda has since suffered four additional Ebola outbreaks, as well as one outbreak of Marburg hemorrhagic fever. However, due to its new approach, Uganda was able to markedly improve its detection and response to these public health emergencies.

All too often, we are most willing to invest in disaster prevention right after a severe disaster has occurred, right after an outbreak of disease or famine or natural disaster, when memories are still fresh. It wold be nice if the pandemics we have already suffered, as well as cautionary stories of SARS, Ebola, the Zika virus and others could lead to actions before the next pandemic looms.